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Adarsh Woollen Industries, Panipat and ors. Vs. Union of India and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 159 of 1971
Judge
Reported inILR1972Delhi119
AppellantAdarsh Woollen Industries, Panipat and ors.
RespondentUnion of India and ors.
Advocates: A.S. Ramachandra Rao,; D.C. Singhania and; D.K. Kapur,
Cases ReferredR. v. Senate of
Excerpt:
.....blacklisting a supplier--when opportunity to be heard to be given.; the requirement of natural justice are that a person accused should know the nature of the accusation made, that he should be given an opportunity to state his case and that the authority should act in good faith. the rules of natural justice however, not being embodied rules, the question whether the requirements of natural justice have been met by the procedure adopted in a given case must depend to a great extend on the facts and circumstances of the case.; even where the doctrine of natural justice may be formally broken, no remedy will be given if the court can confidently say that the additional information which would have been forthcoming, had natural justice been complied with would itself have..........the order dated 16-9-1970 was circulated on 29-9-1970, for quashing the same as violating rules of natural justice. though averments have been made in the petition concerning withholding of payments etc. they do not fall for consideration now. what led to the petition was probably when its tender for supply of 44423 blankets not being: entertained when it was opened on 28-10-1970, despite its offers being the cheapest. even thereafter the petitioner did not file any writ petition immediately but waited till february, 1971 to file the same. it is stated in the return that the government could not have dealings with the firm like the petitioners which was found guilty of cheating for several years. the impugned order was passed by the respondents after giving full opportunity to the.....
Judgment:

S. Rangarajan, J.

(1) The petitioner No. 1 is a partnership firm of which petitioners 2 to 8 are partners who cirry on the business of manufacture of woollen blankets and other woollen products at Panipat It was also registered with the Director of Industries. The petitioner firm had tendered 7178 numbers of woollen blankets for the use of the Army out of which 6848 were accented after inspection and dispatched to the consignee, the C. O. D. Kanpur. After the goods were received by the consignee there was an allegation that the supplies were of substandard quality and re-inspection was arranged by tHe Deputy Director of Inspection, Kanpur (D.G.S. & D.) at the instance of the M.G.O. Branch (Army Headquarters, New Delhi). It was found as a resuit of inspection that as many as 2120 blankets, representing roughly 33% of the accepted lot, were of substandard quality. The blankets which were rejected after reinspection were found over-stamped and the year of supply shown on some of the blankets was 1964. This proved that in spite of the care exercised by the Inspectors at the time of initial inspection, the firm had substituted the inspected stores with sub-standard stores some of which had even been rejected in 1964.

(2) The petitioner firm had supplied sub-standard stores against an earlier order dated 18-12-1964, the petitioner had admitted that it was due to mistake of the godown keeper that sub-standard material had been mixed up in the accepted stores.

(3) In yet another case also C.O.D. Kanpur complained that the firm had supplied sub-standard blankets. On receipt of this complaint reinspection was conducted at the consignee's depot, Kanpur. It was revealed that the petitioner had been adopting the malpractice of mixing rejected/unacceptable stores with the accepted ones, the un- acceptable blankets were found to contain the forged acceptance mark of the Inspector, some of the accepted blankets were super-imposed with a wooden stamp marked 'Adarsh Panipat' and in the case of some of the blankets manufactured in 1964, the year of manufacture was defaced.

(4) By a letter dated 17-11-1966 (copy of which is Annexure R-l to the return filed by the third respondent in this case), the petitioner had admitted, when asked to give its comments on the rejection of certain stores with particular reference to a label containing the facsimile of the acceptance mark of the year 1964 being among the rejected stores, and did not dispute the same; it candidly accepted but gave an excuse that it seemed to have got mixed up with the lot released by unskilled female labour. On 20-12-1966 the petitioner was informed (copy of that letter is Annexure R-11 to the said return of the third respondent) that it had been observed that 40% of the supply released against inspection note dated 24-8-1966 was having different blends than what was inspected by the office of the Director of Inspection and that the material rejected bore an accepance mark of the year 1964 superimposed by the petitioner's stamp 'Adarsh Wollen Mills'. Those blankets were found to be of light weight varying from 4 1 bs. to 4 Ibs. 3 ozs. against the requirements of 4 Ibs. 12 ozs. It was observed that it was matter of surprise to find that such non-standard stores had crept into the bulk inspire of the fact that each bale consisting of 15 blankets was sealed with the lead seal of the official Inspector. The petitioner was asked to explain the above. In the reply of the petitioner (copy of the reply dated 3-1-1967 is Annexure R-III to the return of the third respondent) it was stated as follows :-

'WE acknowledge the receipt of your letter referred above, calling for our Explanationn in response to the said letter.

We submit in response that we feel that a party consisting of 3 responsible employees of this concern who had been the headache to this concern were the bone of this contention.

There was a dispute between them and the management since long, the above gang consisting of 3 persons above mentioned who had been commanding the female labour were prejudiced and had been always after us to defame us and to harm the Industrial Development.

Hence we presume that the foul play mentioned under your letter is a result of their had motive towards the concern to create disreputation to this undertaking availing the benefit of our absence sometime secretly without our knowledge.

We now assure that in future no such type of complaint will be witnessed by your goodself as this day we have shunted the gang out of our establishment,

We request you to lend your hand to wash out the blot and we agree to replace the stores whatever is declared by the consignee to be not conforming to the blend without further going into the botheration of joint inspection etc. at the consignees end.

We are sorry for the inconvenience caused to the consignee as well the staff of inspectorate.'

The business dealings with the petitioner firm were immediately suspended by the circular of the D.G.S. & D. No. CS4/BSR/698, dated 31-1-1967. Later on the business dealings were banned for three years with effect from 16-9-1970 by the Ministry of Supply O.M. No. 13/20/69/V, dated 16-9-1970.

(5) The present Writ Petition has been filed in February, 1971 when the banning of the petitioner firm by the order dated 16-9-1970 was circulated on 29-9-1970, for quashing the same as violating rules of natural justice. Though averments have been made in the petition concerning withholding of payments etc. they do not fall for consideration now. What led to the petition was probably when its tender for supply of 44423 blankets not being: entertained when it was opened on 28-10-1970, despite its offers being the cheapest. Even thereafter the petitioner did not file any Writ Petition immediately but waited till February, 1971 to file the same. It is stated in the return that the Government could not have dealings with the firm like the petitioners which was found guilty of cheating for several years. The impugned order was passed by the respondents after giving full opportunity to the petitioner and after the petitioner had confessed on different occasions.

(6) We are not concerned in this case with a series of decisions of. this court which have held in order to blacklist a supplier the order should be made after giving an opportunity of hearing. (K.G.Khosla & Co. v. Union of India & Am., C.W.P. 477 of 1968 decided on 7-10-1968;(i) Mahavir Hat . & Ors. (1958 2 All England Law Reports 579) (6) concerning what were the requirements of natural justice that the person accused should know the nature of the accusation made, secondly that he should be given an opportunity to state his case, and thirdly, that the Tribunal should act in good faith. The further observations of Harman, J. in that case . made while meeting the argument that the plaintiff (Mr. Byrne) was prevented from calling his wife to testify on his behalf concerning certain aspects are instructive for our present purpose :-

'FURTHER, it is said that the plaintiff was prevented from calling his wife to testify on his behalf. This, I think, is true. but not fatal, because it is clear to me, having heard Mrs. Byrne's evidence in the witness-box, that she would have been able to add nothing on the only point which was relevant, that is to say, an Explanationn of the discrepancies. The whole burden of her song was that there was, and could be, no Explanationn after the lapse of so long a time, having regard to the the way in which the business was conducted. She did not pretend that the discrepancies did not exist, nor that they did not show that money which should have gone to the renter went into the pocket of the exhibitor. If, thereforee, she had been allowed a right of audience, she could not have altered the result.

(7) In the notes of cases by Cyril Grunfield commenting on R. v. Senate of the University of Aston, exP. Roffey (1969 2 All England Reports 694), a case involving a University student and the doctrine of natural justice in the academic affairs of British University, the following is said to be one of the aspects of the decision of the Divisional Court in the above case:-

'ALTHOUGH the doctrine of natural justice may be formally broken, no remedy will be given if the court can confidently say that the additional information which would have been forthcoming, had natural justice been complied with, would itself have made no difference to the decision reached.

(1969 Vol.32 No. 6. The Modern Law Review, pages 680 to 685, at p.684).

(8) It seems to me, thereforee, that in the present case there has been no violation of the principles of natural justice and that even in the view. most favorable to the petitioner that there was any such violation, having regard to the very admission made by the petitioner there could have been no difference in the result. The petitioner had admitted what was alleged but had given an Explanationn for their admitted lapses. The concerned authorities were obviously not impressed by the Explanationn. There was not even a suggestion that rejection of the excuse given, may be even out of hand. was so unreasonable as to merit interference.

(9) In the result the Writ Petition fails and is dismissed with costs. Counsel fee Rs. 250.00.


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